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Trade Policy Review Body
16November2000
TRADE POLICY REVIEW OF JAPAN
14 and 16 November2000
Concluding Remarks by the Chairperson
We have had an open and informative discussion of Japan's trade policies. Members were encouraged by signs of economic recovery in Japan, whose economic prosperity is importantfor the continued recovery of the region,for the health of the world economy and the expansion of trade. Members attributed this nascent recovery largely to Japan's macroeconomic policies and structural reforms. At the same time, Members recognized that the multilateral trading system had contributed to the improved economic outlook for Japan, by keeping foreign markets open to Japan's exports. In commending Japan's recent efforts to implement deregulation and other structural measures, including the removal of barriers to foreign businesses, Members strongly urged Japan to continue its reform process and improve access to its markets for goods and services.
Members expressed their appreciation of Japan's active participation in the work of the WTO. Many Members underlined that their bilateral trade and investment ties with Japan had been strengthened over the recent period. Noting Japan's increased willingness to explore bilateral trade agreements, they sought (and received) assurance that such agreements would be WTO-consistent.
On trade and trade-related policies, Members remarked in particular on Japan's complex tariff (and tariff quota) structure and the fact that the use of non-ad valorem tariffs appeared to conceal high applied rates. Some Members also voiced concern about the complexity and seeming lack of transparency of government procurement practices. Furthermore, many Members were concerned about the complexity of Japan’s sanitary and phytosanitary regulations, including quarantine procedures. In addition, pointing to the low level of inflows of foreign direct investment(FDI) into Japan, Members welcomed Japan's efforts to open further its FDI regime.
On sectoral policies, Members noted that the level of domestic supportfor agriculture was disproportionate to its share in GDP. While Members generally recognized that non-trade concerns did arise in agriculture, some urged Japan (among the world’s largest importers of agricultural products) to address these concernsin a manner that would not unduly distort trade. While recognizing that substantial reforms had been undertaken in the financial services and telecommunications sectors, Members expressed their belief that reform should continue with a view to enhancing competition in these sectors. They also urged Japan to extend reforms to other sectors, such as agriculture, transport, legal services and education services.
Members also sought further clarification in a number of areas, including:
-matters concerning tariff classification and high tariff rates for certain goods;
-the opacity and complexity of tariff quotas and quantitative restrictions;
-alignment of national standards with international standards;
-reform of standards and environment-related regulations;
-competition policy;
-the new agricultural policy embodied in the Basic Law on Food, Agriculture and Rural Areas;
-impediments to market access for certain items, such as rice, leather, and forestry products;
-Japan’s initiative to promote information technology;
- restrictive business practices in Japanese ports;
-independence of regulatory authorities in some areas, such as telecommunications, electricity;
Members expressed their appreciation to the Japanese delegation for their oral and written responses to the large number of questions posed by them, and for the Japanese delegation's undertaking to provide written responses as soon as possible to any outstanding queries.
In conclusion, it is my view that this Review has provided Members with a much better understanding of Japan's trade and trade-related policies, particularly regulatory and other structural reforms. Members were pleased to see signs of Japan's economic recovery; they strongly urged Japan to maintain the momentum of structural reform so as to ensure that the recovery is sustained. It is my sense that Members were reassured by Japan's commitment to multilateralism; nonetheless, they urged Japan to ensure that bilateral and regional arrangements were WTO-consistent. Members also looked to Japan for strong leadership in pursuing future multilateral trade liberalization, including in any new round of negotiations at the WTO.
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